State may lose more than 9,000 defense jobs Study examines the effects of Pentagon cuts.

March 31, 1992|By Tom Bowman | Tom Bowman,Washington Bureau

WASHINGTON -- Maryland is projected to lose more than 9,000 defense industry jobs under Pentagon cutbacks proposed by the Bush administration, and the numbers could go even higher under proposals being pushed in Congress, according to a study released yesterday.

The state, one of the nation's top recipients of defense contracts, would lose 9,481 jobs during the next year under the Bush budget, or about 11 percent of its defense work force, according to a study by the Defense Budget Project, an independent research group often critical of Pentagon spending priorities.

The study group is non-partisan and broadly respected for its reliability.

Under one congressional plan for even deeper spending cuts, the state would lose 11,384 positions, the study found. About 88,000 Marylanders work in defense industry jobs, about 3.7 percent of total state employment, the study said.

"These are not layoffs. These are positions lost in defense," said Conrad Peter Schmidt, economic policy analyst for the project, which said the reductions could come through retirements, attrition or lower recruitment.

By 1997, Maryland would lose another 12,300 jobs under the Bush proposals, while about 14,600 positions could be lost under a defense cutback proposal backed by Wisconsin Rep. Les Aspin, chairman of the House Armed Services Committee, according to the study's projections.

Mr. Bush has proposed cutting $43 billion from the defense budget over the next five years, while Mr. Aspin has suggested $91 billion.

Kenneth Mannella, director of the state's Washington office, cautioned that the study's figures are projections.

State officials still do not know which defense projects will be slashed, he said, and only then would they be able to calculate the effect on Maryland. "A lot of it depends on what programs they cut," he said.

Still, he said, the state will likely receive a "substantial" decrease in defense-related employment in the coming years.

Mr. Mannella said that the state Department of Economic and Employment Development is working with Maryland's defense contractors to cope with lower budgets. And Gov. William Donald Schaefer has joined with the state congressional delegation in pressing for federal assistance to help companies and communities survive the cutbacks.

There are a variety of proposals being drafted in Congress to soften the effects of defense cuts on the states, ranging from job retraining funds to proposals that would help companies retool from defense to civilian projects.

The study found the importance of defense spending to the economy has steadily diminished. Defense spending as a share of the gross national product reached its peak of 6.5 percent at the height of the Reagan defense buildup in 1986. Under the current Bush plan, defense spending's share of GNP will fall to 3.6 percent by 1997. Still, the study said those reductions are smaller than those experienced after World War II and the wars in Korea and Vietnam.

Maryland ranks fifth among the states in its proportion of defense-related employment. The top four are Connecticut, Virginia, Massachusetts and California, the study said.

States such as Maryland, which has seen unemployment growth in excess of the national average in recent years, will have a harder time rebounding from the defense cuts, according to the study. Maryland's unemployment rate rose from 4.6 percent in 1990 to 5.9 percent last year, the study found, for an unemployment change of 1.4 percent between 1988 and 1991, compared with a national increase during the period of 0.9 percent.

Mr. Mannella said some of the state's largest defense contractors, such as Westinghouse and Martin Marietta, have undertaken non-defense work in anticipation of Pentagon cutbacks. But other companies, particularly smaller firms that serve as subcontractors for the defense giants, will need help making the transition to the post-Cold War world.